The Telecom Regulatory Authority of India (TRAI) has issued a tariff order revising national roaming tariffs, wherein it has cut voice tariffs by up to 40% and SMS tariffs by 75%. We estimate that revenues from national roaming contribute anywhere between 4%-7% of mobile revenues and the above cut could impact roaming revenues of telcos by 20%-30%. Consequently, we lower our FY16-17 EPS estimates and 12m TPs by 1-3%.
We also expect further clarity on the TRAI?s policy on OTT applications and network neutrality following the release of the consultation paper on the topic. At present >90% of India?s internet users access the internet though mobile operators and voice revenues contribute to 77% of mobile revenues (Bharti + Idea). Consequently unrestricted use of free VOIP services could have a significant impact on
operator profitability.
